Estimating Practice Exam

What is true about bid shopping or bid peddling?

1. It is a common industry practice

2. It is legal under certain circumstances

3. It is illegal

4. It is encouraged by contractors

The correct answer is: It is illegal

Bid shopping or bid peddling refers to a practice where contractors seek to obtain lower bids from subcontractors after having already submitted their own bid for a project. This can undermine the competitive bidding process and is often viewed negatively as it can lead to unregulated changes in pricing and compromise the quality of work. The assertion that it is illegal stems from the ethical and legal standards upheld in many jurisdictions within the construction industry. Many contracts and agreements explicitly prohibit bid shopping because it can distort market dynamics and lead to unfair practices, such as coercing subcontractors to lower their bids unreasonably. This practice is not only frowned upon, but it can also result in legal consequences for contractors who engage in it, reflecting a broader commitment to fair competition. Understanding this context clarifies why the notion of bid shopping being illegal aligns with industry standards aimed at fostering integrity and fairness. While there may be nuances based on specific laws in different regions, the prevailing sentiment in the industry is that bid shopping is an inappropriate and often illegal approach to the bidding process.